In the UK, turnpikes were an increasingly common way of paying for the maintenance costs of major roads from the early 18thCentury. The UK government allowed private companies, known as Turnpike Trusts, to put up tolls (turnpikes) to collect revenue to upkeep and extend the road system. However, by the 1850s railways took over from turnpikes as the most popular method of transport. The complex and fragmented turnpike system was also seen as an increasing barrier to trade across the UK, and it was effectively abandoned in the late 19th Century as control of the building and maintenance of roads and bridges was given to local government, which collected revenue from local rates and received a subsidy from central government. The development and collapse of the turnpike system provides evidence of the difficulty of finding a single and effective way to fund and operate quasi-public goods.

New technology

The introduction of new technology can often lead to the formation of new markets, and allows existing markets to become complete over time. This occurs for a number of reasons:

1.      New technology can be used to reduce production costs and make it easier for private firms to break-even.

1.      Technology improves the ability of firms to exclude entry to prevent free riders, such as the use of automatic barriers across bridges. Number plate recognition systems can also be used to track and monitor attempts to avoid payments.

2.      Computer systems can be used to enable suppliers to generate and store more knowledge about travellers and about peak flows, and hence reduce information failure, and increase efficiency. For example, cameras and computers can be used to monitor and measure traffic flows over a bridge.

3.      Finally, new technology allows the possibility of creating fast and efficient payment methods, which can avoid the need to queue to have access to public goods.

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